Report: HTC Paying Apple up to $8 per Phone

The HTC One X was the subject of a brief sales ban earlier this year. Photo: Ariel Zambelich/Wired

HTC could be shilling out between $6 and $8 to Apple per phone the company sells as part of the companies’ recent licensing settlement, according to Sterne Agee analyst Shaw Wu.

The pricey licensing fee would net Apple something in the realm of $180 million and $280 million in 2013, based on expectations that HTC will sell between 30 million and 35 million smartphones next year.

In a note to investors, Wu said that this $8 fee was lower than what Apple initially proposed but greater than the $5 HTC pays Microsoft for each Android phone. Microsoft collects licensing fees on around half of all Android devices sold globally for various patents it holds.

Is that $8 amount reasonable? “It’s reasonable in the sense that HTC stood to lose much more than that because its products were not being allowed into the U.S., so Apple had pretty significant leverage,” Notre Dame Law School professor Mark P. McKenna told Wired. “I gather that agreeing to pay also means that it was harder for HTC to design around the patent than it was just to pay the licensing fee.” Paying the licensing fee could be a temporary solution, as well, if HTC eventually ends up designing around these patents in future Android devices.

On Saturday, Apple and HTC put an end to their nearly three-year-long intellectual property feud, dismissing all pending lawsuits and announcing a confidential, 10-year licensing agreement covering current and future patents held by the companies. In the licensing announcement, both companies expressed a desire to focus on innovation instead of litigation.

The agreement is good news for consumers, as HTC devices won’t be blocked (or potentially blocked) for sale in the U.S. for violating Apple patents. However, at this point, it’s unclear if this is the start of a larger trend of Apple cooperating with Android hardware makers or simply one piece of negotiation allowing Apple to redouble its efforts (and financial resources) against bigger threats like Samsung and Google’s Motorola Mobility.